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Journal Articles Industrial and Corporate Change Year : 2015

Financial constraints and firm exports: accounting for heterogeneity, self-selection and endogeneity

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Abstract

The article examines the causal effect of financial constraints on firms' exports. We exploit a firm-level proxy of constraints based on credit ratings and available for a large panel of Italian exporting and non-exporting firms. Our estimation strategy allows to cure for self-selection into exports and endogeneity of financial constraints. At the same time, we can control for unobserved firm fixed effects both in the selection and in the export equation, thus identifying the effect on exports of within-firm changes in financial constraints status. We find that financial constraints produce a sizable reduction in the value of a firm's foreign sales.

Dates and versions

hal-01297118 , version 1 (02-04-2016)

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Angelo Secchi, Federico Tamagni, Chiara Tomasi. Financial constraints and firm exports: accounting for heterogeneity, self-selection and endogeneity. Industrial and Corporate Change, 2015, 25 (5), pp.813-827. ⟨10.1093/icc/dtw033⟩. ⟨hal-01297118⟩
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